What is the WASDE Report and Why is It Important?

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

Click here for PDF of this article

The World Agricultural Supply and Demand Estimates (WASDE) report is prepared monthly by the Interagency Commodity Estimates Committees (ICECs) which are chaired by representatives from the Agricultural Marketing Service, Economic Research Service, Farm Service Agency, and Foreign Agricultural Service.  The National Agricultural Statistics Service provides data about U.S. production and each ICEC (one for each of nine commodities) compile and analyze data from U.S. and foreign sources to produce the report.

The WASDE report is prepared under very tight security in a “lock-up” area inside a USDA building.  On the day of the report release, doors in this room are secured, window shades are closed, and telephone and internet communication blocked!  Analysts attending the meeting must present their credentials to a guard before entering to finalize the report.  The WASDE report is released at 12:00 noon Eastern time, and not a minute sooner.

Who Provides Information?

The Interagency Commodity Estimates Committees described earlier use information from a variety of USDA sources.  The National Agricultural Statistics Service provides data related to U.S. crop and livestock production.  The USDA Foreign Agricultural Service, official data from foreign governments, satellite imagery, and weather data are also provided about foreign crop and livestock production and use.

All of this information is reviewed by ICEC members with broad expertise and perspective.  To arrive at a consensus about the forecasts, the committee considers alternate assessments of domestic and foreign supply and use.

Commodity Balance Sheets

Do you remember back to your introductory economics class?  One of the basic principles taught was supply and demand (see graph below).  Those who develop the WASDE report use information to provide the agricultural industry with a baseline for supply and demand of given commodities.  If a large supply is anticipated (think of it as a bumper yield), but domestic or foreign demand is not high, the result is lower prices. On the flip side, a poor harvest (lower quantity) combined with increased demand results in increasing commodity prices.  We have seen commodity markets move up or down within minutes of a WASDE report being released.

A balance sheet for U.S. and world wheat, rice, coarse grains, oilseeds, and cotton is provided.  Coarse grains include corn, barley, sorghum, and oats).  Oilseeds include soybeans, rapeseed, and palm).  The U.S. also reports sugar, meat, poultry, eggs, and milk on the balance sheet.   Separate estimates are provided for components of supply and demand and domestic use is divided into major categories (for example, corn for feed and corn for ethanol use).

Of interest to many is the reported season-average farm price for farm commodities.  Price forecasts are made by experts who carefully analyze the supply and demand sides of the balance sheet, along with commodity models, and in-depth research of domestic and international issues.

Why is the WASDE Important?

Agriculture operates in a global market and supply and demand are constantly changing.  A monthly balance sheet of major commodities provides farmers, industry professionals, and others a current source of information.

Not everyone agrees with every number reported in each WASDE, but everyone should feel confident that a tremendous amount of research and time are invested to provide the most accurate report possible.

Where Can I Read the WASDE Reports?

Current and historical (since 1974) WASDE reports are available here: https://www.usda.gov/oce/commodity/wasde.  These reports are approximately 40 pages in length, but an approximate five-page summary of coarse grains, oilseeds, and cotton is provided at the beginning of the report.  Detailed data tables accompany the report.

Sources:

WASDE FAQs, United States Department of Agriculture, https://www.usda.gov/oce/commodity-markets/wasde/faqs

WASDE Report, United States Department of Agriculture, https://www.usda.gov/oce/commodity/wasde

 

 

USDA ERS Dairy Forecasts for 2021 & 2022

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

On June 16, the United States Department of Agriculture Economic Research Service (USDA ERS) released its Livestock, Dairy, and Poultry Outlook.  This publication (https://www.ers.usda.gov/webdocs/outlooks/101460/ldp-m-324.pdf?v=4393.1) provides projections about inventory, use, and pricing.  The next report will be released July 16, 2021.

2021 Dairy Forecast

Recently, milk cow numbers have been trending upward.  USDA ERS projects milk cow numbers to average 9.495 million head, an increase of 25,000 from their May projection.  Because of low cow slaughter numbers and higher feed prices, USDA ERS projects that cow numbers will level off during the second half of 2021.  Extreme heat and its effects on cow comfort and grain production caused USDA ERS to lower its milk per cow slightly for the third quarter, putting annual production per cow at 24,065 pounds.

Reduced cheese prices and higher expected dry whey prices have USDA ERS projecting the following milk prices for 2021:

 

Class Price
Class III $17.45/cwt.
Class IV $15.85/cwt.
All-Milk $18.85/cwt.

 

2022 Dairy Forecast

While the number of cows is expected to average 30,000 more than the May projection, USDA ERS puts cow numbers for the year at 9.495 million head, unchanged from 2021.  High input costs and lower expected milk price in mid-2021 translates into a decline in 2022 of milk cow numbers from the levels seen in the second half of 2021.  Milk per cow is expected to increase slightly in 2022, 24,335 pounds.

A projected stronger economy in 2022 should result into positive news for domestic use.  Additionally, international demand for U.S. lactose and whey products is expected to contribute to an increase over the May projection.

USDA ERS makes these projections for milk price in 2022:

 

Class Price
Class III $17.15/cwt.
Class IV $15.95/cwt.
All-Milk $18.75/cwt.

Planning

Once again, the dairy farm economy is going to be tight for the remainder of 2021 into 2022.  Dairy farmers are encouraged to closely monitor expenses, evaluate inputs, and meet with trusted advisors.  The Ohio State University Dairy Excel 15 Measures of Dairy Farm Competitiveness  (https://dairy.osu.edu/sites/dairy/files/imce/2019%2015%20Measures%20of%20Dairy%20Farm%20Competitiveness%20Final%20%281%29.pdf) bulletin is an excellent resource that allows dairy farmers to compare performance against established benchmarks.

What’s going on with Lumber Prices?

by: Brent Sohngen, Professor Environmental and Natural Resource Economics.

This article was originally published at: https://u.osu.edu/aede/2021/05/08/whats-going-on-with-lumber-prices/

In case you haven’t noticed, lumber prices have increased a lot over the last year.  Based on the US Bureau of Labor Statistics Lumber Price Index, which you can find here, lumber prices have increased 180% since April, 2020.  This increase started last fall, and has continued ever since. So, why have they risen, and how high will they go?

Let’s start with the first question, why have they risen?  The economic explanation is relatively straightforward: Demand rose rapidly due to pandemic related building, and supply is really inelastic, as we say in economics.  Thus, while the demand of wood has increased dramatically, the supply of wood hasn’t been able to keep up.  Let’s break this down.

Consider the demand side first.  The construction sector, specifically building and remodeling houses, is one of the largest demanders of lumber in the US and around the world.  New home starts and construction spending cratered at the beginning of the pandemic, but they rebounded pretty quickly.  Remodeling in particular seems to have picked up a real head of steam.

While demand for new construction and remodeling is hot, it’s actually now at about the same level as before the pandemic. So something else must be going on.  One of those something else’s is the price of steel, which has also increased dramatically in the US. Steel is a substitute for wood, especially in commercial construction, and rising steel prices have also driven up demand for lumber and other things that can be made out of wood or steel.

Ok, so the demand side is going crazy.  What about supply?

The supply side in forestry is really inelastic. That is, it’s hard to make big increases in supply in short periods of time.  There are lots of reasons for this.

First, you can’t build a lumber mill overnight.  And after some mills slowed down during the depths of the pandemic, and others closed, it’s not as simple as just turning the key to start the remaining ones back up.  You need trained workers, the machines are pretty complicated and may need some maintenance work before re-starting production, and you need logs.

Second, getting logs is not easy either.  There is a whole complicated supply chain associated with delivering logs to mills that itself has been affected by the pandemic.

Third, the supply of logs is super-inelastic because of the way trees grow.  Plantation trees, which supply around 50% of our timber in the US, put on a lot of value in the 5-10 years before they are harvested. Most people who own these trees don’t want to cut them too early because they’ll miss this value growth, which could be 8-12% or more per year.

When plantation trees are cut, they actually are still growing, perhaps 6% or more per year, so if prices start rising really quickly, many landowners may actually hold them longer than they would otherwise because they get some nice volume growth plus the price growth.   So when prices rise rapidly as they are now, the supply of logs contracts a bit because landowners hold onto their trees.  Seems strange, but the value growth that occurs with the rising prices gives people who own trees a real reason to put off logging for a while.

Fourth, the supply of logs from our main source of imported lumber, Canada, is super inelastic because most supply there is from public lands, and is controlled by government allowable cut constraints. These allowable cut constraints are set administratively, not economically, and thus limit their ability to increase supply in times of high demand.

There are some other issues at play, including US tariffs on wood, but most of this dramatic increase in prices is due to short-term market phenomena related to the rebound from the pandemic, not any long-term structural issues or limitations in supply. In fact, evidence from the US South, which is our main timber growing region in the US, indicates that an enormous area of trees has been planted in the last decade, providing a reasonably large long-term supply of wood.

Further, supplies of plantation timber in other productive regions of the world, especially South America, but also China, New Zealand, Australia, and parts of Southeast Asia, are expanding. The current high prices for lumber may linger for a while as demand continues to rebound from the pandemic, and due to overall inflationary pressures, but over the next 6 months to a year, prices should stabilize.  And over the longer-run, there will be plenty of wood to go around.

The Accuracy and Informativeness of Agricultural Baselines

by: Siddhartha Bora, a Ph.D. student and Ani Katchova, Professor and Farm Income Enhancement Chair, Department of Agricultural, Environmental, and Development Economics, The Ohio State University

United States Department of Agriculture (USDA) and Food and Agricultural Policy Research Institute (FAPRI), University of Missouri are two main sources of baseline projections for US agricultural sector. Published in the beginning of each year, the baselines provide insight about factors influencing the agricultural sector for the next decade. The projections present a conditional scenario based on certain assumptions about macro-economy, weather, and trade, and serve a basis for comparison of alternative policies. In a new study, we evaluate the accuracy and informativeness of USDA and FAPRI baselines since 1997. We find that the predictive content of most variables in the projections diminish after 4-5 years from the current year, and the USDA and FAPRI models do not outperform one another when entire projection path is considered.

The report is available at: https://aede.osu.edu/sites/aede/files/publication_files/AgBaselines2021.pdf

 

 

Farm Office Live to Analyze USDA’s Pandemic Assistance for Producers Initiative

By Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker and Julie Strawser – Ohio State University Extension

April’s “Farm Office Live” will focus on details of the USDA’s Pandemic Assistance for Producers” initiative announced on March 24, 2021. Changes were made in effort to reach a greater share of farming operations and improve USDA pandemic assistance.

During the webinar, we will be sharing details about the pandemic initiative and discussing some of the changes made to the Coronavirus Food Assistance Program (CFAP).  Our Farm Office Team will also provide a legislative update and discuss changes to the Paycheck Protection Program and Employee Retention Credits. They will also be on hand to answer your questions and address any related issues.

Two live sessions will be offered on Wednesday, April 7, from 7:00 – 8:30 p.m. and again on Friday, April 9, from 10:00 – 11:30 a.m. A replay will be available on the Farm Office website if you cannot attend the live event.

Farm Office Live is a webinar series addressing the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues. It is presented by the faculty and educators with the College of Food, Agricultural and Environmental Sciences at The Ohio State University.

To register or view past recordings, visit https://go.osu.edu/farmofficelive.

For more information or to submit a topic for discussion, email Julie Strawser at strawser.35@osu.edu or call the Farm Office at 614-292-2433.

Farm Office Live Continues!

by: Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker – Ohio State University Extension

“Farm Office Live” continues this winter as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues from faculty and educators with the College of Food, Agricultural and Environmental Sciences at The Ohio State University.

Each Farm Office Live begins with presentations on select ag law and farm management topics from our specialists followed by open discussions and a Q&A session. Viewers can attend “Farm Office Live” online each month on Wednesday evening or Friday morning, or can catch a recording of each program.

The full slate of offerings remaining for this winter are:

  • March 10th 7:00 – 8:30 pm
  • March 12th 10:00 – 11:30 am
  • April 7th 7:00 – 8:30 pm
  • April 9th 10:00 – 11:30 am

Topics to be addressed in March include:

  • Coronavirus Food Assistance Program (CFAP)
  • Proposed Stimulus Legislation
  • General Legislative Update
  • Ohio Farm Business Analysis – A Look at Crops
  • Crop Budget & Rental Rates

To register or view past recordings, visit https://go.osu.edu/farmofficelive

For more information or to submit a topic for discussion, email Julie Strawser at strawser.35@osu.edu or call the farm office at 614-292-2433. We look forward to you joining us!

Corn, Soybean and Wheat Enterprise Budgets – Projected Returns for 2021 Increasing Fertilizer Prices May Force Tough Decisions

by: Barry Ward, Leader, Production Business Management & John Barker, Extension Educator, Agriculture & Amos Innovative Program, Knox County.  College of Food, Agricultural and Environmental Sciences & Ohio State University Extension

The profit margin outlook for corn, soybeans and wheat is relatively positive as planting season approaches. Prices of all three of our main commodity crops have moved higher since last summer and forward prices for this fall are currently at levels high enough to project positive returns for 2021 crop production. Recent increases in fertilizer prices have negatively affected projected returns. Higher crop insurance costs as well as moderately higher energy costs relative to last year will also add to overall costs for 2021.

Production costs for Ohio field crops are forecast to be modestly higher compared to last year with higher fertilizer, fuel and crop insurance expenses. Variable costs for corn in Ohio for 2021 are projected to range from $386 to $470 per acre depending on land productivity. Variable costs for 2021 Ohio soybeans are projected to range from $216 to $242 per acre. Wheat variable expenses for 2021 are projected to range from $166 to $198 per acre.

Returns (excluding government payments) will likely be higher for many producers depending on price movement throughout the rest of the growing year. Grain prices currently used as assumptions in the 2021 crop enterprise budgets are $4.30/bushel for corn, $11.55/bushel for soybeans and $6.25/bushel for wheat. Projected returns above variable costs (contribution margin) range from $216 to $434 per acre for corn and $284 to $509 per acre for soybeans. Projected returns above variable costs for wheat range from $193 to $342 per acre. As a reminder, fixed costs (overhead) must be paid from these returns above variable costs. Fixed costs include machinery ownership costs, land costs including rent and payment for owner operator labor and management including other unpaid family labor.

Fertilizer prices continue to increase.  If you have not checked fertilizer prices lately, be prepared for some sticker shock. Producers with some fertilizer purchased and stored or pre-priced prior to recent price increases will likely see a healthier bottom line this upcoming crop year.

Those with little or no fertilizer pre-purchased and stored or pre-priced may want to consider using P and K buildup to furnish crop needs this year in anticipation of possibly lower prices in the future.  Now may be a good time review your fertilizer plans as you are considering how to best utilize your financial resources in 2021.

Use realistic yield goals.  Yield goals vary by field.  Each field has unique characteristics that can impact yield.

Utilize crop removal rates to determine crop nutrient needs.  Crop removal rates can be found in the new Tri-State Fertilizer Recommendations for Corn, Soybeans, Wheat, and Alfalfa (Tables 15 and 16), available at your local Extension Office.

Start with a recent soil test.  If your soil test levels are in the maintenance range or higher, 2021 may be a good year to “borrow” from your soil nutrient bank.

As an example, a 150-bushel corn crop will remove about 55 pounds of P2O5 per acre in the harvested grain.  This would result in a reduction in the soil test level of approximately 3 ppm.

Current budget analyses indicates favorable returns for soybeans compared to corn but crop price change and harvest yields may change this outcome. These projections are based on OSU Extension Ohio Crop Enterprise Budgets. Newly updated Enterprise Budgets for 2021 have been completed and posted to the Farm Office website: https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets

 

 

 

 

 

 

USDA Agricultural Projections to 2030

by: Chris Zoller, Extension Educator, ANR, Tuscarawas County

Click here for PDF version–easier to view Figures

The United States Department of Agriculture (USDA) recently released the interagency report: USDA Agricultural Projections to 2030.  These long-term projections include several assumptions related to the Farm Bill, macroeconomic conditions, farm policy, and trade agreements.  While long-term projections are based on assumptions and many unknowns, they do provide a glimpse of how U.S. farm commodity prices may perform over the next several years.  Anyone interested in reading specific details is encouraged to see the report available here: https://www.ers.usda.gov/webdocs/outlooks/100526/oce-2021-1.pdf?v=3513.2.

This article briefly summarizes selected selections of the 102-page report, including U.S. crop prices, milk production, U.S. farm income, and government payments.  Figures from the report are included to accompany the text.

U.S. Crop Prices

Rising global demand for diversified diets and protein will continue to stimulate import demand for grains. Increased demand for these crops is accompanied by rising competition for market share from countries such as Brazil, Argentina, the EU, and the Black Sea region. The United States also faces challenges related to ongoing tensions with trade partners and a relatively strong U.S. dollar. Although strong trade competition continues, U.S. commodities remain generally competitive in global agricultural markets, with U.S. corn and soybean exports projected at record highs by 2030/31. Nominal prices for wheat, cotton, and rice are expected to rise modestly between 2021/22 and 2030/31.

 

Milk Production

Milk production is projected to rise at a compound annual growth rate of 1.1 percent over the next 10 years, reaching 248 billion pounds in 2030. With slow growth in domestic demand as the economy recovers from the pandemic, the dairy herd will remain relatively flat in the middle of the decade but grow in the latter years. In 2030, milk cows are projected to number 9.43 million head. Economies of scale trends are expected to continue, leading to further farm consolidation. Technological and genetic developments will contribute to increasing yields. In 2030, milk production per cow is projected to average 26,295 pounds.

  • Commercial use of dairy products is expected to rise faster than the growth in the U.S. population over the next decade.
  • Global demand for U.S. dairy products is expected to continue to grow over the next 10 years, with the largest increases being in exports of products with high skim-solids content such as dry skim milk products (nonfat dry milk and skim milk powder), whey products, and lactose.
  • The all-milk price in 2021 is expected to be lower than 2020 as milk production increases significantly. Feed prices are expected to increase from 2020 to 2021. Milk production in 2022 is projected to grow at a rate slower than in 2020 and 2021 because of lagged supply response to relatively low milk prices and relatively high feed prices in 2021. With slow milk production growth in 2022 and an increase in demand as the economy is recovering from the pandemic, the all-milk price is projected to increase in 2022. As the industry adjusts, the all milk price dips to lower levels in 2023-25. The all milk price then increases in nominal terms later in the decade.

 

U.S. Farm Income

Net farm income and net cash income are projected to decrease in 2021. Net farm income is projected to decrease $19.5 billion in 2020 to $100.1 billion in 2021. Net cash farm income is projected to decrease 16.7 percent in 2020 to $111.7 billion for 2021. The projected decline in net farm income for 2021 is primarily because of lower government payments relative to 2020. Farmers received an estimated $24.3 billion in direct payments from the Coronavirus Food Assistance Programs 1 and 2 during 2020. The 2021 farm income value does not include payments made under the Consolidated Appropriations Act 2021 that was passed after the projections were tabulated.

Government Payments

After falling $35 billion in 2021 to $11.5 billion, direct government payments are projected to decline again in 2022 as market prices are expected to improve and ad hoc payment programs expire. Government payments are then expected to climb before decreasing after 2024 through 2030. The Conservation Reserve Program (CRP), ARC and PLC payments collectively account for the largest share of direct government payments to the agricultural sector over 2021-30. These projections also assume no government payments from potential new farm sector programs.

 

Moving Forward

Again, many things can/will happen between now and 2030 to alter these projections.  However, they are one source of information to use for long-term planning.  Based on these projected production levels and prices, will you be competitive in the long-term?  If not, what changes are necessary to make you successful?  If so, what can you do to be even more successful?  I encourage you to talk to your Extension Educator and other advisors as you complete farm business planning.

Lady Landowners Leaving a Legacy Series 

by: Amanda Douridas and Amanda Bennett, OSU Extension

Land is an expensive and important investment that is often handed down through generations. As such, it should be cared for and maintained to remain profitable for future generations.

Almost half of landowners in Ohio are women. OSU Extension in Champaign and Miami Counties are offering a series designed to help female landowners understand critical conservation and farm management issues related to owning land. It will provide participants with the knowledge, skills and confidence to talk with tenants about farming and conservation practices used on their land. The farm management portion will provide an understanding of passing land on to the next generation and help establish fair rental rates by looking at current farm budgets.

The series runs every Friday, February 26 through March 26 from 9:00-11:30 a.m. and will be a blend of in-person and virtual sessions. It is $50 for the series. If you are only able to attend a couple of session, it is $10 per session but there is a lot of value in getting to know other participants in the series and talking with them each week. Registration can be found at go.osu.edu/legacy2021. For more information, please contact Amanda Douridas at Douridas.9@osu.edu or 937-772-6012. Registration deadline is February 24. The detailed agenda can be found at

https://miami.osu.edu/events/lady-landowners-leaving-legacy.

 

Whole Farm Planning – Take Time to Plan Your Work and Work Your Plan

By David Marrison, OSU Extension Educator

We have all heard the saying “Plan Your Work and Work Your Plan.”  Planning is one of the most important aspects of managing any business. This is especially true for farms and agribusinesses due to their complexity and the inherent uncertainties associated with agriculture.

OSU Extension encourages farm families to adopt a whole farm planning approach as they develop strategies for the future success of their business. The whole farm approach allows families to examine the internal structure of their business and then develop business, retirement, transition, estate, and investment plans that work in harmony.

The Farm Business– At the center of most farms and agricultural businesses is the family unit. Each family, individually and collectively, has its own history, values, and goals. It is valuable for the business to begin the planning process by reflecting on family and farm history. Valuable lessons can be learned by all the generations involved by examining past successes and disappointments. The underlying values and goals of the family unit and each individual should also be determined. While these values and goals oftentimes remain unspoken, they have a large impact on how family members treat each other and employees and make business decisions.

An analysis of the current state of the farm should also be conducted to determine the physical, fiscal and personnel status of the business. This analysis should also examine the operation’s efficiency and identify any available resources that are not currently being utilized. The farm’s profitability, business structure, operating procedures and employee management should also be examined. It is also helpful for the management team to identify the external influences that could impact the business in the future. These influences could include any governmental, political, economic, environmental, social or technological elements.

Developing the Five Essential Plans – Once a family has completed its internal analysis, family members can continue the planning process by developing business, retirement, transition, estate, and investment plans. A description of each planning area is given in the following paragraphs. It should be noted that each of these planning areas does not stand alone. Like spokes in a wheel, all will need to work in harmony to ensure the long-term viability of the business. Each area can positively or negatively affect the performance of the others. One example of this would be if investment planning has gone well, more assets will be available to help fund business operations or retirement needs. As plans are developed for each of the five areas, it is essential that the management team examine the effects that each has or could potentially have on the other plans.

 

 

Business Plan– A business must be profitable in the long run in order to exist. On most farms, the major planning that occurs is for the farm’s production practices. An example of this is deciding what variety of corn to plant or deciding what sires to use for breeding cows. However, planning for the success of the farm business should include much more.

A comprehensive business plan should be developed. This plan not only helps the family develop a plan of action for production and operation practices, but also helps develop plans for the financial, marketing, personnel and risk-management sectors of the business. One recommended method of evaluating the farm business is to conduct a SWOT analysis. This analysis examines the Strengths, Weaknesses, Opportunities and Threats in each of these areas. In short, the agricultural business plan presents a picture of the agricultural business or farm, where the business is going, and how it will get there.

Retirement Plan– No one expects to work forever. A strategy to help each business member meet his or her expected retirement needs should be developed. The two main retirement questions that should be addressed are how much money does each family member need for retirement and what will the farm’s obligation be to retirees? A variety of factors such as age at retirement, retirement housing and other retirement accounts held by the family will affect retirement needs. It is essential that retirement plans are established early for all members of the business. It is also important that the profitability of the farm be such that a family member can retire and not adversely affect the financial position of the business.

Transition Plan– The goal of transition planning is to ensure that the business has the resources to continue for many generations. Transition planning helps the family analyze its current situation, examine the future, and then develop a plan to transfer the business to the next generation. This includes planning not only for the transfer of assets but also managerial control. Members of the primary generation should invest time in transferring their knowledge to the next generation.

Estate Plan– Farm estate planning is determining how the farm assets, such as land, buildings, livestock, crops, investments, machinery, feed, savings, life insurance, personal possessions, and debts owed to or by the farm, will be distributed upon the death of the principal operator(s). The estate plan, in concert with the transition plan, helps to address how the off-farm heirs can be fairly treated without jeopardizing the future of the farming heir.

Investment Plan– The primary investments made by farm families are usually in land, machinery, and livestock. Farm operations may, however, wish to invest in such off-farm investments as stocks, bonds, mutual funds, real estate, life insurance, retirement homes, precious metals or disability insurance. These investments allow farm families to save for future education or retirement needs and allow for investment diversification. Factors that farmers will need to consider during investment planning include the rate of return, personal risk tolerance levels, tax considerations and the time horizon available for investing.

More Information- More information about the whole farm planning model can be found in a factsheet accessible at: https://ohioline.osu.edu/factsheet/anr-52

Farm families are encouraged to use this and other OSU Extension farm management resources, along with a competent attorney and accountant, to develop their plans.

Check out the Farm Office Website at http://farmoffice.osu.edu/ for additional farm management resources.